Optimistic statistics, pessimistic expectations

Data from April and May indicates that a slowdown occurred in the Hungarian economy in the second quarter, in comparison with the first quarter of 2019.

Attila Udvardi
head of research
GKI

However, the loss of speed was smaller than expected. What is more, it seems that the weather is very good for agricultural production. Because of these reasons GKI modified its GDP growth forecast from 4 percent to 4.3 percent for 2019. At the same time, GKI calculates with a slowing down for the second half of the year, with the growth rate at 3.5 percent. In the April-May period industrial production expanded by 6 percent.

In the first few months of the year retail sales increased by 5-7 percent, but in May this growth fell to 2.6 percent; at annual level a 5-percent sales growth is likely. Real wages will be 6-6.5 percent higher this year. In March-May 2019 the number of people employed grew by 1 percent, while the number of public workers decreased by approximately 50,000. Hungary’s 3.4-percent unemployment rate is the fourth lowest in the EU. The country’s inflation rate has been the 2nd highest in the EU for more than a year, behind Romania. Prices increased by 3.9 percent in April and May, and were up 3.4 percent in June; the core inflation rate remained 3.8 percent. //